Ryanair vows to cut fares despite profit headwinds

Ryanair has promised to slash fares by 7% this year despite a cocktail of terrorist attacks, strikes in France and a weakened pound holding back profits.

The Irish no-frills carrier saw profits rise 43% to €1.24 billion (£961 million) in the year to March 31, falling short of City hopes for €1.3 billion.

Boss Michael O’Leary admitted a number of Easter bookings had been “adversely impacted” by over 500 flight cancellations following the Brussels terrorists’ attacks and French air traffic strikes.

The firm also warned its first quarter will be hit by cancellations, lower air fares and sterling weakness in the run-up to the Brexit referendum on June 23. Finance boss Neil Sorahan played down an attack by Vote Leave campaigners, who have complained to the police about Ryanair’s latest promotion, which offers cheap flights to expats who want to stay in the EU.

Sorahan told the BBC: “Ryanair runs promotions on an ongoing basis. We don’t know if people on the flights are going to be voting remain, voting leave, or otherwise.”

O’Leary, who cannot vote in the referendum but hopes the UK stays in, has previously criticised the European union and once denounced the European Commission as an “evil empire” as European authorities blocked Ryanair’s efforts to buy Irish airline Aer Lingus.

Ryanair’s numbers come amid turmoil in the travel industry. Last week a shock profit warning and bookings slump had Thomas Cook’s shares spinning to a three-year low as the disappearance of an EgyptAir passenger jet sent another jolt through the tourist industry.

Earlier this month it emerged attacks in Egypt, Paris and Brussels had affected easyjet bookings.

The economic uncertainty has led to airlines cutting fares and O’Leary said he saw no reason for prices to stop falling. He said the group expects full-year profits to rise modestly, by around 13%. But he warned its performance this year is “heavily dependent” on this summer’s bookings and there being no further French strikes.

The shares were flat. Accendo Markets’ head of research Mike van Dulken said this demonstrated “impressive resilience despite news that full-year net profit growth is set to slow and after management delivered an uncharacteristically downbeat update, highlighting terrorism worries potentially pushing falling ticket prices even lower and a rising oil price requiring prudence”.